Tuesday, March 12, 2019
We did get some upside follow through for the overall market but the Dow dropped 96 points on lighter volume. BA is the culprit here as it is still reeling form the recent plane crash and grounding of a number of its planes by foreign governments. The advance/declines were positive. The summation index is trying to turn back up but hasn't just yet. The VIX has fallen though and is back below 14. Not sure what the market will focus on next but rates are heading lower for some reason. Perhaps the Brexit issue in England is causing some worry as it is just about time for some kind of decision. The US/China talks have been out of the news for a few days. On the technical front the indicators have turned back up and are not overbought yet. GE was off 1/8 and the volume was good. Gold rose $10 and the US dollar finished little changed. The XAU added 1 1/2, while GDX gained over 1/3. Volume was pretty light though. I'm still hoping for a drop back to the up trend line here but that remains to be seen. Mentally I'm feeling OK. We've had a nice bounce and now it is a matter of mustering up enough strength to try the 2820 level again on the S&P 500. I can make a case for a decline tomorrow because we've had a textbook 1-2-3 rise form the oversold condition that we hit on Friday. If we were to drop tomorrow the strength of the move lower will tell a lot about where we're headed near term. I'm still leaning bullish here and I do think that 2820 will be taken out and we'll move on to challenge the old highs. I could be wrong but the drop in the VIX tells me the market mood has changed and we should move higher. Gold is holding up well here and that cannot be ignored since it is contrary to the seasonal bias. I'm still looking at the GDX April calls if the price is what I'm willing to risk. We'll see how the Brexit vote goes in England and the foreign markets reaction to that vote. With only three days left in the March option cycle, I won't be attempting any short term trades. There's also no clear S&P signal at the moment either. Europe and Asia were higher overnight. We'll see what tomorrow brings.
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